LOS ANGELES, Feb 21 (Reuters) - The worsening drought in California will for the first time force a complete cutoff of federally supplied irrigation water to most farm districts in the state's Central Valley heartland this year, the U.S. Bureau of Reclamation said on Friday.

The projected 2014 zero allocation to all but a handful of agricultural districts supplied by the federally run Central Valley Project comes three weeks after forecasts of similarly drastic cuts were announced by managers of a separate water-delivery system operated by the state.

California grows nearly half of all U.S. fruits and vegetables, most of that in the Central Valley, and ranks as the No. 1 farm state by value of agricultural products produced each year.

The Central Valley Project, a sprawling network of dams, reservoirs, canals, tunnels and pumping stations, normally supplies enough water to irrigate some three million acres (1.2 million hectares), or about one third of all California's farmland.

While farms usually receive most of the water supplied by the project, some also goes to municipal and industrial users, including nearly one million households. Water is also reserved for conservation of wetlands, fish and wildlife.

The water originates from the Sacramento and San Joaquin river systems in northern California, fed by rainfall and snow-melt from the Sierra Nevada and nearby mountain ranges.

A similar system operated by the state typically provides at least some of the water used to irrigate more than 750,000 acres (304 hectares) of farmland and to meet the drinking supplies for some 25 million people.

The announcement on Friday by the U.S. Reclamation Bureau, while not unexpected, marked the first time in the decades-long history of the Central Valley Project that irrigation districts throughout the region face the prospect of getting no water from the system.

The California Farm Water Coalition, which represents the state's irrigation districts, has estimated that more than 500,000 acres (200,000 hectares) of cropland will be idled this year, meaning a record production loss that could cause billions of dollars in economic damage.

Friday's news "underscores how broken the state's water supply system has become and that significant policy decisions and investments must be made to assure food production is a viable part of California's future," said Mike Wade, executive director of the coalition.

On Thursday, Governor Jerry Brown announced a $687 million drought-relief package to help residents, farm workers and local communities cope with a water shortage shaping up to be the worst in modern California history.

Capping the driest year on record for the state, Brown declared a drought emergency in January and called on residents to reduce water consumption by 20 percent voluntarily.

Ironically, the crisis is unfolding after an all-time banner year for California agriculture, with statewide production valued at $43.5 billion 2012. (Reporting by Steve Gorman; Editing by Alden Bentley and Grant McCool)